Pre-nup. For some couples, these two words send shivers down their spines. The idea of going into a marriage with thoughts of separation can be a bit, well, disheartening. But you sign a marriage licence at the ceremony, so why should the planning of assets between a new couple be any different? People who would be well-advised to get one include those who are:
- Entering a second marriage
- Protecting existing children
- Wanting to avoid legal fees if their relationship were to end
- Have substantial assets compared to their spouse
- Couples without assets who want clarity about the way in which their assets would be divided, including possible inheritances.
“People don’t know what marriage, legally, means,” says Julie Audet, owner of Family Law in a Box in Ottawa. “Every single person intending to get married should spend an hour with a lawyer to understand what marriage means, assets-wise.” Feldstein Family Law Group Professional Corporation in Markham, Ont., are legal commentators and practitioners. They estimate that only about five to 10 percent of married couples choose to enter into prenuptial agreements. A 2003 Harvard study suggested that two main reasons for the lack of prenuptial agreements:
- People think they are unnecessary because they have a false optimism that marriage will last.
- People believe that discussing prenuptial agreements signals uncertainty about marriage. However, it can be argued that it’s better to make decisions out of love rather than in the midst of a divorce when one or both parties could be hurt or angry.
What Can Be Covered
The contents usually address things such as property division and possible spousal support. They can also include provisions that deal with how assets will be split up in the case of adultery. Possible inheritances are a consideration.
Some couples may not think that a prenuptial agreement is necessary. In fact, Julie and her husband were one of them. She says, “People don’t need a pre-nup if they think that the way the government would divide their assets is fair. My husband and I got married and we had nothing. Being a lawyer I already knew what the division of assets looked like and we were okay with that. We built everything together, we both worked full time and we were okay with a 50-50 split.”
Be aware that provisions vary from province to province, but Canadian law tends to try to achieve a relatively equal (in some provinces a “fair”) split. “For many couples it could be different – let’s assume I’m building my business and investing time and money and my husband chooses to work for the local drug store. If we separate I wouldn’t feel that it would be fair if he got half of my business.” The reality is that divorce can happen. And given the sticky nature of most divorces, this is often the worst time to try to fairly divide up assets. A pre-nup can streamline legalities and be created in such a way that it works for that couple’s particular living situation. In the end, a prenuptial agreement can be the smartest thing they commit to before saying “I do.”
It’s never too late; there are post-nuptial agreements. They differ from their pre-wedding counterpart because once you’ve entered into marriage, you fall under certain family laws. This means that any contracts written after marriage must be more carefully scrutinized in the event of a divorce. For more information on marriage and legal issues, contact your nearest Service Canada office.
Originally published in Today’s Bride magazine, Spring/Summer 2015.